BMC has a golden opportunity to take a different track with Numara than it has for past mid-market acquisitions (see Magic Solutions), and it must do so if it hopes to build on this one and drive new revenue for the long haul. Numara enjoys a massive installed base of customers with its Track-It and Footprints product lines in the small and mid-market. They have been hard at work rounding out their portfolio to include Client Management (software management, systems management, and OS management), and other areas. Numara has been on a journey to re-invent itself and has been succeeding. Further, we believe that the culture of the Numara organization and BMC's will align well, as long as Numara is given the autonomy and investment they need to grow their portfolio and momentum in the field.

BMC Will Need Time To Work
Numara customers should expect relatively little change in daily operations for the first few months, as BMC aligns the organizations. If history is a reliable guide, BMC will typically give a larger acquisition such as this the opportunity to remain mostly intact, and inject key people and processes to help align the acquired organization with the BMC culture and ways of doing business. If this holds true for Numara, customers should see it as a positive step.

Get Clear Direction From BMC In Areas Of Overlap
There are several areas of overlap between Numara and BMC. The most obvious of these lies in the mid-market ITSM space where Service-Now has seen significant traction. BMC was late to the Software-as-a-Service game for the ITSM, which gave competitors like Service-Now the opportunity to get a big head start before BMC caught on. They responded very late with two SaaS offerings: Remedy OnDemand, and Remedyforce Service Desk -- the latter being aimed squarely at the mid-market to try to hold back competition by leveraging the Force.com platform. How the Remedyforce offering will be positioned alongside (or instead of) Numara's Track-It and Footprints product lines, as well as BMC's own Service Desk Express on-premises offering will need to be explicitly resolved. Customers should give BMC time to work, but should absolutely press them to deliver clear plans and commitments for their investments, and should expect migration plans to firm up as BMC learns what its customers will and will not accept for a transition plan.

Another critical area of overlap lies in the client management product lines. In 2011, BMC partnered with Matrix42 based in Germany to help maintain and develop the BMC Configuration Automation for Clients (formerly Marimba) product line. We saw this as a positive move because Matrix42 also filled critical gaps for BMC with its own organic strengths in client OS provisioning and migration, as well as deep provisioning and management capabilities for Citrix Hosted Virtual Desktop infrastructures, including XenServer, XenDesktop and XenApp. While we believe that BMC's intent will be to continue to offer both mid-market (Numara) and enterprise (BMC/Marimba) client management offerings, Forrester believes that BMC lacks internal market expertise, skilled product leadership, and a winning strategy in that space- particularly with client virtualization.

Disruption In The Client Management Space Means BMC Needs To Act Fast
Client management vendors in general are facing significant disruption in the form of client virtualization, application virtualization, SaaS-based offerings such as Microsoft's terrific inTune, and the explosion of mobile devices. Matrix42 offers BMC strong capabilities for client virtualization and Numara mobile device management with its Fromdistance acquisition in 2011. However, what customers are really looking for is a set of solutions that can help them manage the technology disruption -- one that they don't have to assemble themselves. Some of the pieces in the BMC portfolio could be re-used, but to get it right would require substantial organic development because customers don't have time for a loosely coupled ruse.

Summary
Forrester believes that the Numara acquisition will bolster BMC's position in the small to mid-market space, that BMC's financial strength will ensure adequate support and ongoing commitment to the Numara product line, and customers should expect a handful of new products to be offered to add to what they already have with Numara, such as Atrium Orchestrator. However, there are several areas of overlap which will require explicit resolution. Remedyforce and Footprints are the most likely to emerge as BMC’s go-forward mid-market ITSM offerings. Until BMC offers clear guidance on its client management strategy, and can present a compelling roadmap that addresses the disruptors facing all client management vendors, Forrester advises caution with client management specifically.

Comments

Dave and team,
Great analysis. But somebody needs to address the elephant in the room. Why did BMC feel the need to buy Numara in the first place? Acquisition of revenue because it is not coming in "organically" is usually a bad sign for vendors and customers.
Rhett

Thanks for weighing in - nice to hear from you. You're teeing up a topic here in which I have some passion and perhaps an opinion or two. BMC is a good company that places a high priority on customer relationships...they will move the earth to make something right if an enterprise customer needs them to. But, BMC's business model and leadership priorities are not optimized for innovation. Having worked there for 4 years, I would argue that it's not an empowering culture that rewards employees for thinking about how to embrace potential disruptions or study the market and propose fresh ideas. The ideas come from executives down to the rank and file to carry out, with an under-developed feedback loop. In such a model, common to large companies, I can only conclude that disruption hits executive radar only after deals are being lost, which is too late. They might be better off developing a more reliable market sensing function.

So, in some markets disruption is something that BMC tends to be reacting to rather than leading. They would probably describe themselves as fast-followers. It's a fine business model and generates cash, so it's hard to argue that there's anything inherently wrong with it...I just don't think of BMC when I think of innovation and creativity, though I think BSM as a concept is brilliant. What does it mean for your comments? BMC's history shows continuous cycles of acquisition, bolstering sales, optimizing the value chain, and product line decline, rather than organic, new idea development. Numara can generate cash and give the sales force something to talk to mid-market customers about, and sell more stuff to.

Should Service-Now care? When I see BMC mid-market customers with the level of energy and zeal about the company and products that Service-Now customers seem to have, I would say yes, but until then just be on guard. Can the Numara leadership team bring that kind of energy? Yes, I think they can if given the room and investment to work. BMC has formidable ITSM DNA in its veins and Numara brings a large mid-market customer base to build on. If these ingredients are combined with the right leadership mindset, customer energy will increase. No doubt, this is what Mr. Beauchamp is hoping for.

you know what is also a bad sign? When vendors constantly feel the need to bash other vendors.
This seems to be your day job when you look around the internet. Bashing about BMC, HP, CA, etc. Turning every bit of news into something bad. It always makes me wonder; is there not enough interesting news to say about Service-Now? Are you so afraid of these big vendors or what is the reason behind this?
I personally do not find it very helpful and it certainly does not make me feel any better about your employer, Service-Now. I would be way more interested if you would share interesting things about your own product.

Agreed. Seems to be a cultural thing at SN. It's getting tedious seeing the same taunts and cheap, sarcastic jibes throughout the social networks from different members of the SN team. Give it a rest, and get on with telling us why you think you're so good. Not sure about others, but I never want to do business with a company that has an arrogant, bully-boy persona.

Dave's post was about BMC's acquisition of Numara. I asked a loaded, but fair, question about the reasoning behind the acquisition. Two of you turned the comment section into a complaint box about me (your comments about ServiceNow are misguided) which is a complete waste of time and a hijacking of a legitimate blog subject. If you have anything left to say about me, take it here http://bit.ly/yxsuj5 and let Dave have his blog back.

I do business with arrogant companies every day. I'm typing this on an apple device.
If folks think they can define ServiceNow by Rhett's "jabs", I have news, wrong.
On the inside I can assure you that the monster some people see is not a monster. In the middle of the night any "bump" can make people jump.
Right now we are in the middle of the night for our industry.
We have to remember that we all actually WORK together.
We don't get paid by the same BIG bank, but ultimate, I work with Rob from Australia, Rhett form ServiceNow and anyone else, who's not hiding.
Now let's focus on not letting people rent space in our heads.
No one has the ability to read intention in 140 or 40000 characters.
Everyone in this small ITSM space will at some point over the next 10 years, work directly with your current competitor.
The field is level, unfortunately there is no one watching the game.
So let's just hang in there, I know enough people at BMC, Numara and ServiceNow to assure you that the companies are not evil and the people are decent.
Breath folks and I'll see you at the water cooler.
Chris

People form opinions and define their views of a company based on what they see, read and hear - especially if what they read comes from persons representing that company. Whether they tweet or write a whitepaper, people can and do discern intention. I don't believe the small ITSM space is level and I know there are a lot of people watching it - many of them "hiding"

I look forward to seeing how this acquisition plays out. I know that here in Australia, the small to mid-market is very much alive and well, and there are many TrackIt users here. It will be interesting to see if they continue with the product, or move up to one of the other offerings from BMC, or look elsewhere for their helpdesk software needs.

Like the blog post. I recently joined BMC from all places... Citrix. I was at Citrix for ~6 years and worked on many projects. At the end of the day, I have been tasked with helping BMC address "VDI". While I may be one guy, I do bring the market expertise!

In the end, I'd say your statement: "BMC lacks internal market expertise, skilled product leadership, and a winning strategy in that space- particularly with client virtualization." Is no long valid.